• The Road to Brexit [PDF]
  • October 2016
  • Foreword by Iain Duncan Smith
  • Published by the Legatum Institute and the Centre for Social Justice

FOREWORD

On the 23 June 2016, the citizens of the United Kingdom voted to leave the European Union. It is simply impossible to overstate the scale of this decision and the  consequent nature of the changes which will ensue. This decision will, in due course, effect the livelihoods of families up and down the country and across all income groups. It is therefore right for the CSJ to be involved in the debate, even if for no other reason than to ensure that the purpose of improving the lives of the lowest income groups in society remains at the heart of all planning as we leave.

There are three areas which the CSJ and the Legatum Institute will seek to address over the next few weeks and months. The first is how we ensure that the concerns and worries of those who voted to leave are understood and addressed as a priority by the government (the subject of the publication 48:52 Healing a Divided Britain). The second is how we undertake the process of our departure (the subject of this paper). The third paper will focus on the actions government and industry should take to ensure that the British economy is best placed to take full advantage of the opportunities that may flow as we leave. Within this context, we will set out how those in the bottom five deciles can benefit from Brexit (the subject of a third publication).

This publication is a record of a seminar held at All Souls College, Oxford University, in September 2016. The day was led by John Redwood MP and consisted of presentations on different aspects of process and detailing priorities for the UK government to ensure a positive outcome at the end of the process. Whilst these papers represent the views of the individuals concerned and not the collective view of the CSJ or Legatum Institute, nonetheless we believe it is important that there should be a greater level of informed debate and this publication’s purpose is to do just that.

It is to be expected that in the aftermath of such a momentous decision, people should worry about what other countries will want. However, the theme of this paper is that the UK needs now to be clear about what we want and how we will deliver it. Clarity and simplicity of purpose are key.

The Rt. Hon. Iain Duncan Smith


EXECUTIVE SUMMARY

The Conference concluded that the Government should now make due haste with sending an Article 50 letter and introducing a Repeal Bill for the 1972 European Communities Act. The country and business wish to reduce the uncertainty. The Conference was swayed by a survey of larger businesses and by the business debate into seeing the need for speed, and the opportunities that flow from exit.

The Conference was persuaded that leaving the EU is primarily a UK Parliamentary process, repealing the 1972 Act and renewing EU law as UK law to ensure continuity. There was general agreement that this is best done by means of a short general Principles and Powers Bill, mirroring exactly the short legislation of the 1972 Act to impose the EU legal authority in the first place.

There were mixed opinions on the timing of the Article 50 letter given present court cases, but general agreement that, subject to the legal position, an early letter is the best approach. There was a general view that the Government will win the court case anyway, and that the Government could also win a vote in Parliament, given the stance of the Leader of the Opposition to put the matter beyond doubt and pre-empt the court proceedings. The best course could be to pass a Commons motion in support of a letter and to send it as soon as possible, whatever the state of the legal proceedings.

The Conference was sympathetic to the view that the trade negotiations can be short and simple. The UK can offer either to carry forward current tariff free trade with service sector passports, or to fall back on the World Trade Organisation standard tariff trade. The UK would recommend the former, but could live with the latter. Rather than negotiate, it is just a question of which the rest of the EU will choose. Whilst the EU Commission is likely to threaten the imposition of WTO rules, the member states are likely to opt for the status quo of tariff free trade given business lobbies in their own countries. The balance of trade and tariff rates under WTO rules is more damaging to the rest of the EU than to the UK, given the UK’s bias to services which are all tariff free, and given the devaluation of the pound which has already made rest of the EU products less price competitive without extra tariffs.

The UK Government has ruled out belonging to the EEA or copying Norway or Switzerland. The UK Government should not negotiate over taking back control of borders, laws and taxes. The UK should not be willing to negotiate its future sovereignty with the rest of the EU.

The referendum said Leave. The Government and both campaigns clearly stated this outcome would be implemented. The ballot paper did not suggest a renegotiation or a partial membership as options, so the Government has rightly ruled these out.

The Conference saw various opportunities for improvement out of the EU. It thought the UK could become the world leader for free trade once it has the right to negotiate its own trade deals. Being an open economy with a high proportion of service business is ideal to pioneer free trade. University representatives thought the UK could do better in various scientific and technological areas like medicine and agriculture when we can set our own regulatory framework, as the EU is often cramping for new ideas. The University also sought reassurance and more work on EU funding schemes and collaborative research. [Continue to PDF]


Related

  • Press Release: 'Tough on Brexit, Tough On the Causes of Brexit’, Urge Leading Think Tanks [View]
  • 48:52—Healing a Divided Nation—Report [PDF]